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Saturday, 27 June 2009

Europe banks eye IPO brief for $10 bln Islamic bank

LONDON, June 25 (Reuters) - European banks are showing interest in investing in and providing initial public offering advice to a planned $10 billion Islamic bank, the chairman of the Union of Arab Banks told Reuters on Thursday.
Adnan Ahmed Yousif said the bank, which would be the first Islamic bank of its size and which is to be launched by year-end, is attracting foreign investors.
"The good thing is that in the past two months we have received a good interest level from European banks, they want to contribute both capital and do the IPO for us," he said.
He declined to name the interested European banks, and when asked about their nationalities, he said "German banks... and other European (banks) also." He said no French bank was involved.
The bank has been mulled over for years by Saudi billionaire Sheikh Saleh Kamel, who is chairman of Bahrain-based Al Baraka Banking, of which Yousif is chief executive.
The emerging Islamic finance industry has boomed over the past years, with its assets being estimated at between $700 million and $1 billion, but is yet to produce a bank large enough to compete with the Islamic subsidiaries of Western banks.
Most Islamic banks are also focussing on only one of the three regions, in which the industry has established itself, South East Asia, the Gulf Arab region and Europe.
Yousif earlier said some $3.5 billion have already been raised from Middle Eastern private and semi-governmental investors including Islamic Development Bank and Saudi Investment Bank, with a $3 billion IPO planned for the end of the year.
"The bank is not going to compete with other Islamic banks, it will combine investment, wholesale and retail," he said on Thursday.
Yousif said he will not take any role in the new bank.
"I am just giving business advice, it is free and Sheikh Saleh is providing his expertise," he said.
Islamic banks cater to investors who would like to avoid earning or paying interest, viewed as usury under Islamic law.---Alfalah Consulting - KL: www.alfalahconsulting.comIslamic finance consultant: www.ahmad-sanusi-husain.comIslamic Investment Malaysia: www.islamic-invest-malaysia.com